Historically the mining sector has been the main driver of growth in the Namibian economy, and it is still a significant contributor to the country’s GDP, as well as a key employer and skills development driver. The recent boom in minerals hit Namibia during a time when there is much uncertainty regarding the proposed policy on mining, with regards to taxation, legislation, local and black ownership participation and beneficiation, among others. In stark contrast to the days when South African companies dominated Namibia’s mining landscape, the industry is now truly internationally represented, with players from Australia, Canada, China, France, Israel and the UK now operating here.
Namibia is a world-class producer of rough diamonds, uranium oxide, high-grade zinc and acid-grade fluorspar, as well as a producer of gold bullion, blister copper, lead concentrate, salt and dimension stone. A number of world-class companies using state-of-the-art mining and processing technologies are members of the Namibian Chamber of Mines: Rio Tinto plc and Vedanta plc mining companies respectively produce uranium oxide at Rössing Mine and special high-grade zinc at the Skorpion Mine and refinery. Paladin Energy’s Langer Heinrich Uranium Mine is in full production and the expansion of phase 3 continues. Construction of AREVA’s Trekoppje Mine and other upcoming uranium development projects such as Extract’s Husab project will turn Namibia into a major world producer of uranium oxide. We spoke to Steve Galloway, the Managing Director of RMB Namibia on how his company is unlocking the mining potential.
RMB Namibia has participated in most of Namibia’s pre-eminent mining deals since it entered the market about three years ago though some of its team members were involved in the Namibian mining sector long before they joined the RMB. Its ability to identify and support good projects years before the deals are concluded means RMB Namibia has gained a reputation in the Namibian mining community as an important contributor to the sector’s development.
The result of RMB’s knowledge of the Namibian mining industry has been its involvement in various capacities in the four major mining sector investments over the past three years. “We have participated in some of the most significant, recent mining deals in Namibia mostly because we are able to offer globally competitive rates while building long-term, lasting relationships with our clients,” says RMB Namibia’s Steve Galloway. “RMB Namibia is increasing its capacity in the country to position itself for the expected interest from investors particularly in sectors such as infrastructure, energy, real estate and resources.”
One of RMB Namibia’s current priorities is the Chinese-owned Husab mine development. China General Nuclear Power Company’s (CGNPC) new Husab uranium mine, discovered by Extract Resources in 2008, was purchased by CGNPC in 2012, and is soon to be the second largest uranium mine in the world. “Husab is the largest mining project-build in Africa and is expected to contribute 20% of Namibia’s export earnings and 5% of its GDP and will be a major source of uranium for China’s nuclear power industry for many years,” says Galloway who served as Extract Resources non-executive chairman from 2009-2012.
The RMB Namibia team is also working on other uranium, diamond, and base- and ferrous- metal projects, from advanced project-advisory work, to capital raising, funding and a range of trade, hedging and banking products.
Prior to joining RMB Namibia, some of the team were involved with Australian uranium production company Paladin Energy’s establishment of the Langer Heinrich uranium mine, with RMB Namibia more recently funding the stage three uranium mine. RMB Namibia also acted as the only local funder in the US$150-million revolving credit facility provided for the funding of B2Gold’s current Otjikoto mine project, as well as acting as co-funder in Debmarine Namibia’s acquisition of the US$80-million Mafuta, the world’s largest mining vessel.
Namibia’s mining sector continues to attract investors mostly as a result of government’s consistent policies while the expected adoption of a mining charter by the Chamber of Mines of Namibia is considered positive for investment in the country’s mining sector. Namibia’s growth potential is also an attraction for mining investors with GDP growth of around 5.7% /year over the last five years expected to increase to 6%-7% as major projects are built over the next five years. PF